The Federal Government has submitted a supplementary appropriation bill of N465.64 billion along with a request to borrow N2.103 trillion for the financial year, 2015, ending in six weeks time. The expected deficit arising from the above would be financed by additional borrowing of N1.601trillion through the debt management office. In a letter to Senate President, Dr Bukola Saraki, President Muhammadu Buhari said the supplementary budget would be predicated on oil production of 2.2003 million barrels per day, with benchmark price of $48 per barrel and an exchange rate of N190 to $1.
The breakdown of the supplementary budget shows that N413.36 billion would be for fuel subsidy payment while N10.62 billion was earmarked for the payment of outstanding severance gratuity and allowances of outgone and incoming legislators and legislative aides. Also, the fight against Boko Haram in the North-East code named “Operation Zaman Lafiya” has been billed for N29.96 billion for the third and fourth quarters of 2015.
President Buhari, in the letter, recalled that the 2015 budget was predicated on oil production of 2.2782million barrels per day, benchmark oil price of $53 per barrel and an exchange rate of 190 to $1. Based on these key assumptions, the following fiscal budget was projected: FGN budget revenue N3.452 trillion, made up of share of oil and minerals revenue- N1.645trillion; share of non oil revenue, N1.215 trillion; FGN Independent revenue, N489.3 billion.
Federal Government’s aggregate expenditure was estimated at N4.485 trillion, comprising statutory transfers,N354.34 billion; debt service, N953.6 billion; recurrent non-debt (personnel costs), N1.828 trillion; recurrent non debt overhead, N791.2 billion; capital expenditure, N536.6 billion. In the letter, President Buhari noted that “the implementation of the FGN2015 budget has been fraught with significant revenue shortfalls due to continuous decline in oil price, oil production shortfall and non full non oil revenue.
“You may wish to further note that owing to the need to sustain the current progress in addressing the security challenges and other important obligations of government, emergency expenditure items required urgent funding is projected at N465.64 billion. Given this new level of expenditure and revenue constraint, the 2015 budget, which has a projected fiscal deficit of N1.041 trillion or 1.09 per cent in GDP, with the deficit largely financed by the domestic borrowing of N502.1 billion and foreign borrowing of N380 billion, making a total borrowing amounting to N882.12 billion.” According to President Buhari, the expected deficit arising from the above is projected at N2.103 trillion or 2.19 per cent of GDP would be financed by additional borrowing of N1.601 trillion through the Debt Management Office.